With the way US stock exchanges had been bouncing, I had not been paying close enough attention to dry bulk shipping companies.
Two shipping entities reported this week - Genco Shipping (GNK) and Eagle Bulk (EGLE).
Since I own shares of Genco, and they had some useful Macro data, let me start there.
- The historically low orderbook is the card that vessel owner have been harping about most. But, if it is indeed a factor, it is playing out differently depending on the vessel category. The smaller vessels seem to be earning higher-than-average rates.
Does the data incorporate the Covid lockdown in Shanghai? Does the steel mill data cover the lockdown period?
Grain trade re-routing - Slide 25
Coal trade re-routing - Slide 26
GNK’s Cape avg of $24.6K daily (Slide 18) seems significantly higher than what I have seen reported for the Cape category. Not sure if that incorporates other factors e.g. using less expensive fuel, slower sailing speeds, or the time-charter mix.
Dividend hike is also a surprise.
Not to be repetitive, but every now and then I want to thank you for your generous sharing of your knowledge of this extremely important and to me almost opaque leading indicator sector of the economy.
You have made me money with almost no effort on my part.
THANK YOU, again, (and again and again).
Thanks david fb
There was a slight disconnect with the subject line. The entity that had better data on what the thread subject alluded to was Eagle Bulk (EGLE).
GNK had a couple of slides that alluded to steps the Chinese govt was taking to keep their economy growing. But EGLE capture this better in their Q1 2022
slides. You can parse the other slides, but Slide 21 has a three column table.
My thinking is that if China doesn’t keep up with its major bulk ordering (Iron Ore & Coal), it will struggle with steel production for both local and export purposes. If that happens, China will struggle on keeping up its GDP numbers. I think India has a similar issue, but more so on the coal side.
Eagle Bulk own mid-size category vessels (Ultramax and Supramax), and those vessels are weighted towards minor bulks vs major bulks.
However, as the pie chart shows, about 1/3 of their cargo is major bulk.
…and given the enormous overhanging property internal debt peril China clearly is dealing with, and other associated woes of rapid unbalanced development under the control of a corrupt insider cadre, dry bulk shipping stats are an extremely useful tell tale of reality.